June/July 2013

Mines built on trust

Revenue-sharing agreements between B.C. and First Nations move projects forward

By
Ian Ewing

Williams Lake Indian Band chief Ann Louie, left, signed an economic and community development agreement with B.C., on March 12, which will see the First Nation receive a share of the province’s mineral tax revenues from the expansion of Imperial Metals’ Mount Polley mine. Minister of Aboriginal Relations and Reconciliation Ida Chong, right, looks on | Courtesy of the Province of British Columbia

British Columbia recently signed a pair of revenue-sharing agreements that will see money the province takes in from the expansion of a mining project
redistributed to local aboriginal communities. The latest accords are among a growing number that are helping miners and First Nations develop workable
relationships.

On March 12, Aboriginal Relations and Reconciliation Minister Ida Chong, signed Economic and Community Development Agreements (ECDA) with both the Williams
Lake Indian Band and the Xat’sull First Nation (Soda Creek Indian Band). The agreements promise each band shares of the revenue from Imperial Metals’
expansion of the Mount Polley mine, near Williams Lake, B.C. Under the agreements, 16.5 per cent of the Incremental Mineral Tax Revenue taken in by the
province each year from Mount Polley will be given to the Xat’sull First Nation, while the Williams Lake Indian Band will receive 18.5 per cent.

At the signing, Williams Lake Indian Band chief Ann Louie noted such agreements are important so every party affected by a project benefits from it. “For
industry, First Nations and government to amicably co-exist, there has to be a reasonable sharing of the benefits derived from natural resources in First
Nations’ traditional territories,” she said.

The Mount Polley agreements are the sixth and seventh ECDAs the B.C. government has signed relating to mining in the traditional territories of First
Nations groups, and the 14th and 15th non-treaty agreements signed over­all. “These agreements support the dialogue between First Nations and British
Columbia that is critical to future planning and decision-making around the project,” said Chong.

“All in all, I think it’s enhanced the three-way relationship between government, First Nations and industry,” said Tim Fisch, general manager of the Mount
Polley operation. Although the agreements do not take effect until expansion becomes operational in 2016, the company has already seen benefits. Fisch
noted that they have seen their permitting process expedited in the wake of such agreements and consultations.

“[The agreements] are meant to create a higher level of certainty for mining projects,” added Robin Platts, communications manager with the aboriginal
relations and reconciliation ministry of B.C. “It speeds up the process of approval by creating support and partnership with First Nations with interests
overlapping major mines.

“B.C. is definitely a leader in negotiating these types of agreements,” he said. “B.C. was the first province to share mineral tax [royalties] from major
mines with local impacted First Nations.”

Another company, New Gold, is also reaping the benefits of an earlier agreement. The New Afton mine near Kamloops was the subject of the first
mining-related ECDA signed by the B.C. government three years ago. Without the ECDA and a Participation Agreement signed with the Stk’em­lupsemc of the
Secwepemc Nation (SSN), the mine likely would not have been built.

“The First Nations are our partners,” said Julie Taylor, director for corporate communications and investor relations at New Gold. “While the money helps
smooth the way and definitely opens doors with the First Nations, that is not the most important aspect of what we have done. The benefits we have
experienced from the work with SSN have a lot to do with the relationships we have forged rather than the money we have promised.”

SSN chief Shane Gottfriedson agreed that trust has been built: “I think the one thing with New Gold, they learned a lot from us. I think there are things
they can improve on, [but] I think they’re a company that when they say they’re going to do something, they’re going to do it. We showed a lot of trust and
patience in the company, and we’re going to receive the benefits in the near future,” he said, once the mine reaches its first full year of production and
capital costs are paid down.

The agreements provide tangible benefits for all parties involved. For First Nations, the funds are a boost to their economic development efforts. For
mining companies, the agreements provide certainty and a proven collaborative process to apply in the future. The province, meanwhile, considers the
agreements as another part of its commitment to create new jobs and support existing ones.

And with New Gold pursuing the Blackwater gold-silver project near Prince George, B.C., its relationship with SSN should serve it well. “They’re very
well-versed on how to deal with First Nations and our issues, and I think they’ve been a good company that knows the process,” said Gottfriedson. “I think
they’re going to take that experience and use it working with the Blackwater project.”